Gov. Andy Beshear signed an executive order Thursday establishing new statewide expectations for companies seeking to develop data centers in Kentucky.
“[Data center companies] must invest responsibly, operate transparently, and work in partnership with our people and our communities,” Beshear said during his weekly press briefing. “They will be held to the same high standards we demand of any potential partner and they must prove that their investment will deliver lasting benefits to Kentucky’s working families.”
The order comes as Kentucky has seen growing interest in large-scale data center projects, which can require significant amounts of electricity and water. Several counties across the state have passed moratoriums on data center development, giving officials time to enact regulations at the local level.
Beshear emphasized that the executive order “doesn't say yes to any data center” and that whether to welcome a project is up to each local jurisdiction, but said companies must first demonstrate they can meet the state's expectations.
The executive order establishes three primary commitments for data center developers:
- Demonstrate they can meet their energy needs without increasing electric rates for existing customers while avoiding adverse environmental impacts.
- Commit to paying their full and fair share of state and local taxes, including taxes supporting schools and local governments.
- Engage openly with local leaders and residents, answering questions about proposed projects and potential economic benefits.
Beshear said developers will be required to submit an energy plan to the Kentucky Energy and Environment Cabinet showing how projects will avoid increasing electricity costs for families and businesses. He also directed the Kentucky Public Service Commission (PSC) to deny utility requests to recover data center-related costs from other ratepayers.
Energy and Environment Cabinet Secretary John Lyons said the cabinet's review of required energy plans will provide information to help the PSC evaluate future utility requests related to data center development.
“It's important that Kentucky learn lessons from other states that maybe have not implemented data centers in the most effective way to protect ratepayers,” said PSC Chair Angie Hatton.
The executive order drew criticism from Senate President Robert Stivers, who released a statement describing the Governor’s action as political theater rather than sound public policy.
“If we're going to establish a lasting framework for data centers, it should be done the right way, through the legislative process, with input from all involved parties,” Stivers said. “Unlike an executive order issued for headlines, the General Assembly is taking a deliberate approach. We're coordinating with our federal delegation, including Congressman Brett Guthrie, to ensure Kentucky's policies complement, not conflict, with federal efforts.”
Legislation filed during the General Assembly’s 2026 legislative session – HB 593, sponsored by Rep. Josh Bray – included ratepayer protections and provisions for data center development. While it passed the House, the bill did not advance in the Senate.
- Learn more about data centers in Kentucky by watching KACo’s Data Centers 101 webinar from June 2026.
